The basic version of the new 7-inch Kindle Fire will be priced at $159. The tablet features 1 GB of RAM and a new processor, which Amazon claims is 44% faster than the chip in the first Kindle Fire, NBC News noted. Amazon said the updated Kindle Fire will start shipping on Sept. 14.

The Internet retailing giant also unveiled a larger Kindle Fire, called the Kindle Fire HD. It has a 8.9-inch screen with a 1,920 x 1,200 display and a front-facing camera.

Shares of Amazon rose more than 2% in Thursday afternoon trading.

Additionally, Amazon announced a new Kindle with a front-lit screen, called the Kindle Paperwhite. The Paperwhite will hit store shelves on Oct. 1, priced at $119 for models with only Wi-Fi connectivity, and $179 for models with 3G capabilities.

The Kindle Fire was aimed at challenging Apple‘s (NASDAQ:AAPL) market-dominating iPad. The iPad currently comes in just one size with a 9.7-inch screen, but Apple is rumored to be about to unveil a 7.85-inch iPad Mini, possibly as soon as next month.

Amazon claims that the Kindle Fire grabbed 22% of U.S. tablet sales in the nearly one year since its original release. However, the company doesn’t release specific sales numbers for its tablets. Industry analysts say Kindle Fire sales started strong, but faded after last year’s holiday shopping season.

The market for tablets is growing crowded with new entries from Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG) and Samsung.